Panel to Propose Raising or Partially Lifting Postal Savings Cap

May 25, 2018

Tokyo- A Japanese government panel decided Thursday to propose raising or partially lifting the cap on "yucho" savings at Japan Post Bank, while locking out the option of keeping the status quo.

The limit on the total yucho savings per person, including ordinary and time savings, was raised by 3 million yen to 13 million yen in April 2016, the first hike in 25 years.

The panel will decide its final proposal from three options--eliminating the cap for ordinary savings, raising the cap on the total savings amount and combining the first two options, Kazumasa Iwata, head of the panel on postal service privatization, said at a press conference.

The banking industry opposes any further hike in the cap at Japan Post Bank, claiming that an increase would trigger flows of funds from private-sector financial institutions to the unit of Japan Post Holdings Co. <6178>, which is still held more than 50 pct by the Japanese government despite the privatization of the postal service group.

The Financial Services Agency is also against a hike in the savings cap. An additional increase in the yucho savings limit is unlikely to cause a shift of funds from private institutions to Japan Post Bank, Iwata claimed, noting that such fund flows did not occur after the last hike.

The panel, which is currently conducting a triennial comprehensive review of the postal service privatization, initially planned to come up with its proposals, including a review of the savings cap, in spring this year for submission to the government. But its work has been delayed due to resistance from the banking industry.

Iwata said only that the panel hopes to present its proposals "as early as possible," without referring to a specific timing. Jiji Press